Shares of Spicejet and IndiGo jumped on Wednesday morning after the private sector airlines bagged half of Jet Airways’ slots allotted so far. Shares of Interglobe Aviation, which runs the IndiGo airline gained by nearly 4% to hit the day’s high at Rs 1,623. Spicejet share price jumped by more than 9% to hit the day’s high at Rs 134.05. Meanwhile, shares of the cash-strapped carrier Jet Airways slumped to a fresh 52-week low. Jet Airways shares cracked nearly 7% to hit an intraday low of Rs 120.25 on BSE. The development comes after the firm saw high profile exits in a matter of two days. Jet Airways CEO Vinay Dube resigned from the airline with immediate effect on Tuesday. Dube cited personal reasons for his departure even as Jet Airways continues to make desperate attempts for revival.
Earlier on Monday, Jet Airways deputy chief executive and chief financial officer (CFO) Amit Agarwal had also resigned due to personal reasons, with immediate effect.
Meanwhile, low-cost carriers SpiceJet and IndiGo bagged more than half of Jet Airways’ vacant slots allocated so far, further diminishing hopes of a revival of Jet Airways. The MoCA (Civil Aviation Ministry) has granted 479 landing and take-off slots so far out of the totl of 766 held by Jet across all airports. Of these 479, SpiceJet bagged 130 market leader IndiGo received permission to operate 127 slots.
Taking stock of the development, Edelweiss Securities said that SpiceJet is best placed to benefit from Jet’s grounding. According to the firm, SpiceJet is taking the greatest advantage of slots vacated by Jet Airways, especially in Tier I cities such as Mumbai. “While SpiceJet’s growth rate has converged up to the industry’s, we expect a significant portion of lost passengers as a result of Jet’s shutdown to flock to SpiceJet given the distribution of slots. This should cause growth at SpiceJet to return to 2–3x industry’s,” Edelweiss Securities noted.
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